The Daily Shot: 29-Oct-24
• The United States
• Canada
• The United Kingdom
• Europe
• Asia-Pacific
• China
• Emerging Markets
• Cryptocurrency
• Commodities
• Energy
• Equities
• Credit
• Rates
• Food for Thought
The United States
1. Economists have upgraded their projections for next year’s wage growth.
2. Here is a look at job openings trends by company size.
Source: JP Morgan Research; @carlquintanilla
3. An increasing percentage of higher-income households are struggling with debt.
h/t LPL Research
4. The Dallas Fed’s manufacturing index is showing significant improvement, with a strong surge in outlook.
Forward-looking indicators are considerably stronger than those reflecting current conditions.
– Capacity utilization:
– Employment:
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5. Market-based inflation expectations should be heading lower with oil prices.
Source: @TheTerminal, Bloomberg Finance L.P.
6. The US dollar rally remains intact for now (2 charts).
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Canada
1. Consumer confidence continues to strengthen.
2. The BoC’s policy rate divergence with the US is at its highest level in decades.
Source: Hugo Ste-Marie, Portfolio & Quantitative Strategy Global Equity Research, Scotia Capital
3. A lower household debt-service ratio could support increased consumer spending and bolster the housing market, according to Oxford Economics.
Source: Oxford Economics
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The United Kingdom
1. UK shoppers pulled back on spending this month, according to the CBI, …
Source: Reuters Read full article
… forcing retailers to keep reducing prices.
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2. Gilt yields are climbing.
• Could they increase further on budget day?
Source: Capital Economics
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Europe
1. An improving credit impulse in the Eurozone could bolster economic expansion.
Source: BCA Research
2. Spain’s retail sales growth has been robust.
3. Here is a look at the EU’s green energy imports and trade partners.
Source: Eurostat Read full article
4. Finally, we have some data on Ukrainian refugees in the EU.
Source: Eurostat Read full article
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Asia-Pacific
1. Japan’s unemployment rate fell again last month while the jobs-to-applications ratio inched higher.
2. The Aussie dollar’s short-term implied vol has been rising ahead of the US elections.
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China
1. The renminbi continues to weaken.
2. The PBoC’s balance sheet expansion has been driven by lending activities.
Source: TS Lombard
3. This chart shows China’s increasing weight in the global economy.
Source: Oxford Economics
• Despite its growing influence, growth spillovers from China to the rest of the world have declined.
Source: Oxford Economics
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Emerging Markets
1. Economists continue to revise upward their estimates for Brazil’s 2024 GDP growth.
2. Mexican exports are running in line with last year’s levels.
3. Iran’s currency has depreciated by over 80% since the onset of COVID.
Source: Bonbast
4. Here is a look at selected countries’ exports to China and the US.
Source: TS Lombard
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Cryptocurrency
1. Bitcoin broke above resistance at $70k ahead of the US elections.
Source: @TheTerminal, Bloomberg Finance L.P.
2. The ETH/BTC price ratio is trending lower.
3. There was an uptick in short liquidations over the weekend, but not as much compared with the BTC move above $60K earlier this month.
Source: Coinglass
4. The Crypto Fear & Greed Index remains in “greed” territory.
Source: Alternative.me
5. Crypto funds saw inflows last week, although investors continued to exit Ethereum-focused products.
Source: CoinShares Read full article
• Here is a look at net weekly flows into crypto funds. The second panel shows cumulative flows.
Source: Deutsche Bank Research
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6. Only 12% of the top 50 altcoins outperformed BTC over the past month. Could we see a rotation? (2 charts)
Source: Blockchain Center
Source: Blockchain Center
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Commodities
1. Gold hit its 40th record high in 2024 (2 charts).
• So far, it’s been the best year for gold in decades.
• Where has the world’s gold supply originated?
Source: Codera Analytics
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2. Chicago hog futures continue to rally.
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Energy
1. Crude oil remains under pressure as Israel’s “calibrated” attack left Iran’s oil infrastructure unscathed.
• The longer-dated portion of the Brent curve has been repriced lower in recent weeks.
• Oil implied vol declined.
• Energy shares sold off.
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2. Shares of energy companies have been underperforming.
3. The bounce in crack spreads has stalled.
4. US natural gas futures are selling off again.
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Equities
1. Earnings beats remain elevated relative to recent history.
Source: @KevRGordon Read full article
• Earnings beats have been well rewarded so far in this earnings season.
Source: BofA Global Research; @MikeZaccardi
• Sales beats are close to their historical average.
Source: Deutsche Bank Research
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2. Equity risk premium is moving lower again.
Source: LPL Research
• Current valuations indicate that the S&P 500 equal-weight index is likely to outperform over the next decade, though both indices may only deliver low single-digit annualized returns.
Source: BofA Global Research; @MikeZaccardi
3. Stocks are entering a seasonally strong period post-election/FOMC meeting.
Source: Aazan Habib, Paradigm Capital
4. Here’s a look at the turnover among S&P 500 index members.
Source: Goldman Sachs; @SamRo
5. The S&P 500 is holding support despite deviating far above its long-term trend.
6. The equal-weighted US consumer discretionary/staples price ratio remains approaching resistance, albeit within a long-term uptrend.
Source: Aazan Habib, Paradigm Capital
7. Next, we have some updates on the volatility market.
• VIX remains elevated.
• The VIX curve is now deep in backwardation.
Here is the one-week shift in the S&P 500 short-term volatility curve.
Source: @TheTerminal, Bloomberg Finance L.P.
• Investors are increasingly long on equity futures while also shifting to a net long position in VIX futures, which is unusual.
Source: Simon White, Bloomberg Markets Live Blog
• Options markets are pricing in larger moves on earnings days in this season.
Source: JP Morgan Research; @dailychartbook
• Options trading activity continues to hit record highs.
Source: @financialtimes Read full article
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Credit
1. Cat bonds continue to outperform despite the recent hurricane damage.
Source: @climate Read full article
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2. The rise in Treasury yields weighed on high-yield new issuance this month.
Source: PitchBook
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Rates
1. Treasury implied volatility continues to climb, …
… diverging from realized vol.
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2. The backup in Treasury yields after the first Fed rate cut has been unusual.
Source: @biancoresearch
3. Treasury yields keep rising despite lower crude oil prices.
Source: @TheTerminal, Bloomberg Finance L.P.
4. Elevated indirect bidder participation in the 5-year note auction suggests robust foreign demand.
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Food for Thought
1. US manufacturing job changes by county type:
Source: Economic Innovation Group Read full article
• Job growth in manufacturing and total employment for states with the largest manufacturing sectors:
Source: Economic Innovation Group Read full article
• Change in manufacturing jobs by state:
Source: Economic Innovation Group Read full article
• Change in manufacturing employment by industry:
Source: Economic Innovation Group Read full article
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2. County-level distribution of online donors by political affiliation:
Source: The Washington Post Read full article
3. Percentage of new state residents who lived abroad one year ago:
Source: @axios Read full article
4. GLP-1 drug candidates in the pipeline:
Source: The Economist Read full article
5. Ukrainian long-range strikes inside Russia:
Source: @WSJ Read full article
6. Degrees with the highest and lowest return on investment:
Source: Visual Capitalist Read full article
7. Cities with the worst traffic in the world:
Source: Detrack Systems
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